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Thinking of going into business from your home, garage, or another tight spot? You may not be alone, since are roughly 15 million home-based businesses in the U.S.1
The Famous Business That Started in a Garage
Home-based entrepreneurs have a rich heritage, and you may be surprised to learn just how many of America’s most famous companies were started in a humble garage. If you’re ready to park your car in the street and get down to business, this infographic could be for you! Garage beginnings are sometimes little more than urban legends in the business world. But occasionally there’s truth behind the claim, as in the case of Hewlett-Packard. HP was started in Dave Packard’s tiny Palo Alto garage, which some call the birthplace of Silicon Valley. The 12-by-18 foot space was used for everything from product research to manufacturing – that is, until HP quickly outgrew its tiny home and relocated to a real office in 1940. Though the garage served as headquarters for barely a year, it is a beloved part of Silicon Valley heritage and serves as a sightseeing attraction to this day!
Many famous businesses that started in garages are technology giants like Apple, Amazon, and Google. But beloved toy company Mattel has similar roots. In 1938, founder Elliott Handler worked out of a shared garage workshop in LA, crafting decorative items out of plastics. In fact, Elliott’s first best-seller, in 1940, was a decorative lapel pin shaped like a woman’s hand. It wasn’t until 1959 that the Barbie doll came on the scene, at the suggestion of Elliott’s wife and business partner, Ruth Handler. Since then, over one billion Barbie dolls have been sold: enough to circle the Earth more than seven times!2
Of course, not all businesses with humble beginnings started in garages. In the case of Nike, founder Phil Knight got his start selling sneakers from the trunk of a green Plymouth Valiant. And Harley Davidson was founded in 1903 in a large wooden shed. Over 100 years later, Harley’s corporate headquarters is located on the site of the original shed in Milwaukee, Wisconsin! What’s the takeaway? You may not need a garage to start your home-based business, as long as you have a designated place to get to work.
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<a href="https://www.gradschools.com/get-informed/student-guide/what-is-an-ai-to-help-me-apply-to-grad-school">7 Companies That Started In The Garage</a><strong>Courtesy of gradschools.com</strong></p><a href="https://www.gradschools.com/get-informed/student-guide/what-is-an-ai-to-help-me-apply-to-grad-school"><img alt="business that started in a garage" border="0" src="https://www.gradschools.com/wp-content/uploads/2023/10/business-in-garage-gs-scaled.jpg" /></a></p>
Home Based Businesses in the U.S.
Famous businesses that got their start in private homes are actually not so unique. Over half of businesses in the U.S. operate out of the owner’s house, which means that the (slight) majority of American businesses are home-based. So perhaps Jeff Bezos wasn’t so unusual when he founded Amazon from his Seattle home! Of course, not all home-based businesses reach Amazon’s current size of 1.46 million employees5 – a whopping 81.7% had no employees other than the proprietor.6 And 86.3% of small businesses earned under $100,000 per year.7
To be fair, not everyone who starts a business in a garage or spare bedroom dreams of being the next Mr. Bezos. The largest sector for home-based businesses is services, which includes areas like childcare and personal or healthcare services.9 Construction, retail, finance, and real estate are other big sectors for entrepreneurs who operate out of their personal houses.9 Whether you’re planning on starting a daycare center in your home, opening an online store, or getting a bookkeeping business off the ground, you may think as small or large as you like!
Who Starts Home Based Businesses?
Steve Jobs was only 20 years old when he and two partners started Apple in his parents’ garage. Not everyone is such an early-bloomer. In fact, the average age of a first-time entrepreneur is 40 – good news if your twenties are far behind you. And while most famous founders in the past have been men, women just might be catching up. In 2023, over 42% of businesses were owned by women3, compared to 36.3% in 2012!9
Entrepreneurship is not just for the already-wealthy. When Elliott Handler started the industrial design company that would eventually become Mattel, he bought $200 of equipment on credit. Today, about 30% of businesses are launched for an investment of less than $5,000.8
Finally, many business owners were well-educated, with over half reporting that they had earned a college degree.9 And a number of top entrepreneurs have MBAs—for example, Elon Musk (Tesla), Larry Page (Google), Phil Knight (Nike), and Scott McNealy (Sun Microsystems).
Successful Home Based Businesses
Apple’s first sale was 50 computers sold to a local store called the Byte Shop in 1976. Fast forward to 2022, when over 225.3 million iPhones were sold!8 In 2022, Apple employed around 164,000 people9, and it is one of the most-recognized brands in the world. Of course, not every successful home-based business gets out of the garage, and for many entrepreneurs, that’s just fine! The majority of home-based businesses are sole-proprietorships, and as mentioned, and most don’t have any employees other than the owner. Some business owners may choose self-employment because working from home sounds like a welcome change from a long commute and 9-to-5 workday. And according to Forbes, entrepreneurs may turn to their homes when they want the flexibility to scale up or down, which isn’t always possible when leasing costly office space.9
That’s not to say starting a home-based business is necessarily easy! Over 34% of non-employer firms (companies with no employees) reported working 40 or more hours a week in their businesses.9 And more than 60% said their primary role in the business was producing goods and services. That means most business owners are key players, whether they work from home or not! But if starting a business from your home or garage is your goal, you might be in good company. Be sure to borrow inspiration from the many successful entrepreneurs who weren’t afraid to dream big in small spaces!
1 https://www.businessdit.com/home-based-business-statistics/ | 2 https://www.kcra.com/article/barbie-doll-makes-debut-march-9-1959/43246566# | 3 https://ecommercetips.org/women-in-business/ | 4 https://www.earnmydegree.com/small-business-ideas/businesses-started-garages | 5 https://www.statista.com/statistics/1324557/quarterly-number-of-amazon-employees/ | 6 https://advocacy.sba.gov/wp-content/uploads/2023/03/Frequently-Asked-Questions-About-Small-Business-March-2023-508c.pdf | 7 https://www.fundera.com/resources/small-business-revenue-statistics | 8 https://smallbiztrends.com/2023/07/startup-statistics.html | https://www.bankmycell.com/blog/how-many-iphones-have-been-sold/ | 9 https://www.macrotrends.net/stocks/charts/AAPL/apple/number-of-employees#:~:text=Interactive%20chart%20of%20Apple%20(AAPL,a%204.76%25%20increase%20from%202020. | 10 forbes.com/sites/investopedia/2011/06/27/the-top-6-benefits-of-starting-a-home-based-business/#42bddf485ed9
Additional Sources: https://www.cato.org/publications/facilitating-personal-improvement-entrepreneurship-home-based-businesses | https://stockanalysis.com/stocks/amzn/employees/ | https://www.incfile.com/blog/women-in-business-statistics | https://online.hbs.edu/blog/post/strategies-for-securing-tech-startup-funding#:~:text=About%2033%20percent%20of%20startups,challenges%20you’ll%20likely%20encounter. | https://www.demandsage.com/iphone-user-statistics/#:~:text=Apple%20made%20a%20total%20of%20225.3%20million%20global%20iPhone%20sales%20in%202022. | https://stockanalysis.com/stocks/aapl/employees/ | state.gov/documents/organization/62809.pdf | hp.com/us/en/hp-information/about-hp/history/hp-garage/hp-garage-timeline.html | corporate.mattel.com/about-us/history | forbes.com/companies/nike | harley-davidson.com/content/h-d/en_US/company/locations.html | entrepreneur.com/article/197538 | entrepreneur.com/article/235357 | google.com/about/company/history | applemuseum.bott.org/sections/computers/a1.html
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